Interesting Updates on WWE Network

[Slyfox696]

This was "buried" in the various press releases the WWE made when announcing their 2012 fourth quarter earnings and their yearly earnings. Some very interesting notes on the thought process of the WWE regarding the direction of WWE Network.

Regarding a potential WWE network, we are evaluating multiple approaches. We believe that a premium subscription model is the best approach in the U.S. to capitalize on our fans' commitment to our brands and their desire for more WWE content. Based on our market research, we estimate that a fully distributed domestic pay network could ultimately attract between 2 million and 4 million subscribers at a "steady state." These subscriber estimates derive from a projected base of approximately 47 million WWE digital TV households in the US (including lapsed fans), and the proportion of which have an affinity for WWE content, although there is no guarantee that this affinity will translate into actual subscribers. These take-rates are based on a value proposition for the network that reflects inclusion of our pay-per-view events, except WrestleMania, as well as compelling original content. Under our preferred subscription model, while our pay-per-view events would still be offered on an á la carte basis as currently available, the research indicates that a WWE network offering would drive significant consumer interest (including households that currently do not purchase pay-per-view events). At a proposed price per month between $12.99 and $14.99, this would represent incremental revenue to WWE of between $125 million and $250 million and incremental EBITDA between $50 million and $150 million. Actual results are contingent on several factors, including the necessity of entering into distribution agreements, and such results could vary materially from the expected range based on the rate of subscriber adoption and churn rates, as well as changes in pricing, promotion levels and distribution terms. Until a base of approximately 1 million subscribers is achieved, we estimate the network would represent a net investment for WWE. Ultimately, we believe a network and other distribution and monetization options would represent a sizable economic opportunity in the U.S. and internationally.

http://ir.corporate.wwe.com/Cache/1500047423.PDF?Y=&O=PDF&D=&fid=1500047423&T=&iid=4121687

The interesting points:

1) The WWE believes they can ultimately attract between 2 and 4 million subscribers.
2) The WWE Network would include all PPVs, except Wrestlemania
3) PPVs would still be offered as they currently are
4) The WWE plans to propose a price between $12.99 and $14.99
5) The WWE expects to lose money on the WWE Network until they hit roughly 1 million subscribers


Very interesting and informative. It's nice to see some "hard" numbers, even if these ideas are not set in stone yet. So, if we assume these ideas come to fruition, and WWE Network is available on your TV provider, how likely are you to subscribe?

 

[ABMorales787]

The interesting points:

1) The WWE believes they can ultimately attract between 2 and 4 million subscribers.
2) The WWE Network would include all PPVs, except Wrestlemania
3) PPVs would still be offered as they currently are
4) The WWE plans to propose a price between $12.99 and $14.99
5) The WWE expects to lose money on the WWE Network until they hit roughly 1 million subscribers


Very interesting and informative. It's nice to see some "hard" numbers, even if these ideas are not set in stone yet. So, if we assume these ideas come to fruition, and WWE Network is available on your TV provider, how likely are you to subscribe?

I believe they can make the network a success. Especially with the potential monthly $12 to $15 price range. That's a hell of a bundle when it's promising consistent WWE programming as well all PPV events besides Wrestlemania and older shows. I'd certainly get it. Weighting the amount of content they can offer against the amount I could get elsewhere online as well as adding the viewing quality (those older TV shows look like crap on streams), 15 dollars make it very much worth it.

 

[JJ15776]

Anybody who orders more than three PPVs a year (besides WrestleMania) would be a fool not to subscribe to the network. If it's $15 a month, that's $180 a year, which is the same price as four PPVs and only $15 more than the price of three high definition PPVs.

That's a hell of a deal. I'll subscribe just for the PPVs alone, and there's going to be a lot more content than just the PPVs.

 

[ITALIAN NYC]

This would have been a sick idea 15 years ago when you had no choice but to order PPVS. I would have had this in a heart beat. Sadly, considering you can basically find anything online for free, I just dont see it taking off like they want to.

 

[#tamale]

I would get it if it's available over here. The price is worth it for the extended library alone.

It seems like they do have an idea of how successful it will be, but like anything, it's going to take time.

 

[George Steele's Barber]

0% chance I would subscribe. I hate paying my cable every month as it is. Every extra dolar sends me further and further in to rage.

This network has little to offer anyone that doesn't buy a few non-WM PPVs a year. I can't see more than 200k people paying for this. Their 2 to 4 million subscriber numbers seem obscene. Plus every dollar spent on the network is clearly a dollar taken away from the "a la carte" PPV or on-demand revenue. This feels more like a power play on the PPV providers than a serious endeavour.

I still feel like the WWE network belongs as a basic cable channel with commercials. Maybe included in some type of sports package. They have to be able to put up better numbers than IonTV. The key would be to find a way to combine PPV programming on a basic cable network.

I don't know, other than watching way too much TV in my life I'm no expert but everything about this feels like smoke and mirrors, not that Vince would ever do anything underhanded.

 

[Brother Love]

I love baseball but have no intention of ordering and paying extra for the MLB network
I love football but have no intention of ordering and paying extra for the NFL network.
I love wrestling but have no intention of ordering and paying extra for the WWE network.
WWE is forgetting the demographic of people like me that like a product but are not willing to pay extra for it. I'm sure they will do just fine in the long run but I think if they move shows like RAW & Smackdown to their network they will lose some of ther viewing audiance. Howard Stern moved to Sirius and while he brought in a good number of listeners he has no where near the audiance he once had. People loved him but didn't want to pay extra to listen to him and I'm sure the same thing will happen to the WWE. That's just my opinion.

 

[snowblind56]

It really depends on the content that they are offering on the channel. Besides the pay per views, how are they going to fill up 24 hours a day, 7 days a week? If they would fill up most of that time showing old Raw's, PPV's and whatnot from their film archive, I sure as hell would subscribe. But if all they are going to do is fill it with nonsense reality tv and reruns of the weeks shows, there is no way I would subscribe.

 

[Pedigree1]

But how are they are going to run it is my question. If they have attitude eras wcw mid south wrestling and all the PPVs except WM then yah 12-15 a month extra is not too bad. But if all there going to do is show last weeks episodes of raw and smackdown,stupid reality shit(which i hate as much as going to the dentist) then hell no i wouldnt pay.

2-4 million subscribers does seem a lot to ask for. I really think they be lucky to hit 500K WWE owns a shitload of footage but enough to fill 24 hours a day 7 days a weeks worth? Show WCW PPvs. The original GAB,WarGames,nitros,thunders,shit i even miss sunday night heat. Show the old Wrestlemania's. But if there are to do that,could they get around the chris benoit situation? If your paying extra money a month for the WWE network does that rule still apply? I know thats not the topic,but someone had to bring it up!

 

[DirtyD79]

I'm sorry but I don't have an extra 15 dollars a month to give my cable company just for WWE. I'd want it if it was part of a package like the NFL Network and The Speed Channel. As a stand alone channel though, It just ain't happenin'.

 

[Azane]

Too many things that I'd want to see would be censored or cut out, as WWE would try too hard to promote their own agenda, which I can't fault them for, it's just one of the reasons I don't think it would be for me.

Their B show PPVs haven't been enticing me to order as of late either, it gives them less incentive to make their shows better, they already have draws lower than what they're expecting from this network.... They really are putting up numbers close to RAW ratings, that's incredibly delusional, you need to expect the best case scenario for it to be about the lowest PPV sale rate, so 200k as someone said is probably the best they can expect with the current product.

They already spend over an hour a week with their Replays during Raw/Smackdown, that they cant even fill 5 hours. (This last point is why I not longer watch Smackdown)

 

[shattered dreams]

This network has little to offer anyone that doesn't buy a few non-WM PPVs a year. I can't see more than 200k people paying for this. Their 2 to 4 million subscriber numbers seem obscene. Plus every dollar spent on the network is clearly a dollar taken away from the "a la carte" PPV or on-demand revenue. This feels more like a power play on the PPV providers than a serious endeavour.

These points kind of echo my thoughts. When I first heard about the network I thought it was a good idea as a way to break from the outdated PPV model. But what it seems like is that WWE was never able to attract sponsors or investors to make the idea work. If they had this thing would have launched a long time ago. Instead they are going to try and mix the two and hope for the best. I am highly skeptical they have the content for this. If they stick with PG they end up ruling out much of their rabid fanbase due to infuriating editing. If they don't then mommy is going to cancel the channel once she finds out what little jimmy is wasting the school clothes money on. Even if they keep the whole audience somehow they have the issue of not even doing half a million buys for their best non-wrestlemania PPVs and for their lower tier stuff 200,000 is a best case scenario. I have no idea how they expect to get 1 million, let alone 4 million (barring a potentially disastrous move of RAW). Seems like now you get a PPV and a months worth of content for 15 bucks, which is a pretty remarkable drop, yet still a lot for the average person to pay just for wrestling each month. I don't know how much they make under the current system from each PPV (once other parties are paid) which makes it tough to see if there is a silver lining here on what otherwise looks like a sketchy business venture.

 

[Remix]

0% chance I would subscribe. I hate paying my cable every month as it is. Every extra dolar sends me further and further in to rage.

This network has little to offer anyone that doesn't buy a few non-WM PPVs a year. I can't see more than 200k people paying for this. Their 2 to 4 million subscriber numbers seem obscene. Plus every dollar spent on the network is clearly a dollar taken away from the "a la carte" PPV or on-demand revenue. This feels more like a power play on the PPV providers than a serious endeavour.

I still feel like the WWE network belongs as a basic cable channel with commercials. Maybe included in some type of sports package. They have to be able to put up better numbers than IonTV. The key would be to find a way to combine PPV programming on a basic cable network.

I don't know, other than watching way too much TV in my life I'm no expert but everything about this feels like smoke and mirrors, not that Vince would ever do anything underhanded.

Actually, WWE make about the same per subscriber as they do per PPV buy. Since WWE only make ~30% of the cost of buying a PPV (the rest goes to the cable companies), wheras they'd be making 100% of the money from subscribers it works out as being roughly the same. It's still delusional to expect millions of people to buy their network though. WWE can't get much more than a million people to buy 'Mania. Why do they think they'll get two million to pay for minor PPVs that get less than half of what 'Mania does?

 

[shattered dreams]

Actually, WWE make about the same per subscriber as they do per PPV buy. Since WWE only make ~30% of the cost of buying a PPV (the rest goes to the cable companies), wheras they'd be making 100% of the money from subscribers it works out as being roughly the same. It's still delusional to expect millions of people to buy their network though. WWE can't get much more than a million people to buy 'Mania. Why do they think they'll get two million to pay for minor PPVs that get less than half of what 'Mania does?

I have no idea but I guess it is cost difference related. If they indeed make a similar amount then it might be a good long-term move for that reason alone. People would be more likely to buy a PPV at that price generally speaking, then again WWE still incurs all the costs related with distributing it which they didn't before.